Missing deadlines is never a good idea, and this is especially true as related to filing mechanics liens. Every state has a deadline by which a mechanics lien must be filed, and if the deadline passes, the claimant’s right to file a valid mechanics lien is generally extinguished. While it is occasionally true that the exact date a lien claimant last furnished labor and material to a project, or the exact date of a project’s completion may be subject to some dispute, it is always in the a potential lien claimant’s best interest to make sure any is filed well-within the applicable deadlines, so that the specific deadline calculation is only an academic determination. For the most part, a mechanics lien that is filed after the appropriate time period has passed will be challenged by the property owner, and the (invalid) lien will need to e removed from the property, at the lien claimant’s expense. However, other than the admittedly stiff penalty of having a lien declared invalid, there is generally no additional penalty imposed on a lien claimant who mistakenly files a lien after the deadline has passed (presuming it was not filed in bad faith and removed when required).
Potential new Florida legislation could drastically alter this landscape for lien claimants, however, and result in severe penalties for a late-filing lien claimant – whether or not the lien claimant had a legitimate argument that the lien was filed on time.
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Potential New Florida Legislation
The Florida legislature is currently considering SB 460, by Senator Simpson, that seeks to amend Florida mechanics lien law. Among other modifications to Florida construction lien law, SB 460 contains the following language:
Recording a claim of lien after the 90-day period is an act of fraud, punishable as provided under s. 713.31.
Mechanics liens in Florida must be filed within 90 days of the lien claimant’s last furnishing of labor and/or materials to the project. Failure to do so will result in the invalidity of the lien. Pursuant to Senator Simpson’s proposed legislation, however, not only would a late-filed lien be invalid, it would also be an act of fraud. The proposed amendment to Florida’s mechanics lien law, however, despite referencing a “punishment statute” for the willful filing of a fraudulent lien, makes no specific mention of any “willfullness” requirement, and instead makes the mere tardy filing of the lien the fraudulent act.
the recording of a mechanics lien after the applicable 90-day period would be considered an act of fraud whether or not there was a genuine question of the date by which the lien was required of being recorded. As put forth clearly in the statutory language quoted above, the recording of a mechanics lien after the applicable 90-day period would be considered an act of fraud whether or not there was a genuine question of the date by which the lien was required of being recorded. Pursuant to s. 713.31, the filing of a fraudulent lien is a third-degree felony, and results in a license complaint being made to The Department of Business and Professional Regulation.
The Chilling Effect of the Potential New Florida Legislation
The proposed amendment, in my opinion, is not artfully drafted and its over-reaching and over-zealous attempt to penalize the filers of late-filed liens, would have a chilling effect on potential lien claimants. If there is any question of whether a potential lien has passed its deadline, the lien claimant will now likely choose not to file, and thereby be deprived of the security of the mechanics lien to which he/she is entitled.
Willfully late-filed liens are similar to willfully exaggerated liens, and it would make sense to punish them as such. It makes little sense to punish a lien claimant with a felony and a license complaint if there is any question that his lien was filed appropriately. However, there is a real possibility of the deadline date being legitimately contested, since it is a question of fact. It makes little sense to punish a lien claimant with a felony and a license complaint if there is any question that his lien was filed appropriately.
Further, the lack of any requirement that the late filing be willful fails to consider the possibility that a lien claimant could attempt to comply with the 90-day deadline requirement, deliver the lien to the clerk’s office within that period, and still have the lien recorded after the deadline has passed due to the delay of the clerk’s office. It cannot be Senator Simpson’s desire to punish lien claimants for a potential delay in the clerk’s office.
Whether or not this becomes an issue will depend on whether the proposed amendment passes as currently drafted. The goal of limiting actual fraudulently filed liens is worthwhile, but doing so in such a broad manner and at the expense of the people who are supposed to be protected by the mechanics lien statute (and who may have done everything correctly) is a short-sighted and dangerous position.
In my opinion, the proposed amendment should be altered to only provide the penalty for lien claimants who knowingly and willfully filed the lien after their deadline had passed.